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MBA: Mortgage Credit Availability Subsided In May

Sarah Wolak
Jun 09, 2022
Mortgage Bankers Association Logo

Credit availability continued to tighten in May, according to data from the Mortgage Credit Availability Index.

KEY TAKEAWAYS
  • Credit availability steadily continued to decline in may, indicating an ongoing trend of rigid lending standards.
  • The Mortgage Credit Availability Index also revealed a decrease in government credit, attributed to a cutback in streamline refinance programs.

Mortgage credit availability decreased in May per the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology.

The index fell 0.9%, indicating that lending standards are tightening. This is the third straight month the index shifted downwards, largely due to shrinking refinance loans. 

“Mortgage credit supply declined for the third month in a row to the lowest level since July 2021,” Joel Kan, MBA’s associate vice president of economic and industry forecasting said. "The index remains more than 30% below pre-pandemic levels, as recent months’ credit tightening has occurred in refinance loan programs."

Kan added that the decrease in government credit was driven mainly by a reduction in streamline refinance programs. He continued, “Jumbo credit availability, which was starting to see a more meaningful recovery from 2020’s pullback, declined after three months of expansion.”   

The drop in credit availability comes shortly after Freddie Mac announced that mortgage rates spiked 14 points this week to 5.23%. 

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